Thursday, October 29, 2009

You Need Momentum, Not Just Motion


via Startup Professionals Musings by MartinZwilling on 10/29/09

Too many people confuse motion with momentum. We all know someone who repeatedly tells us how “busy” they are, when it’s hard to see what they get done. Momentum is moving things forward (mass x velocity). Founders or employees in constant motion, but with no momentum, will kill any startup.

It is true that motion in any direction is often better than no motion at all. But motion without momentum is even less productive than no motion at all. For a more thorough discussion of this phenomenon, see a recent book entitled “Fake Work: Why People Are Working Harder than Ever but Accomplishing Less”, by Brent Petersen and Gaylan Neilson.

So how do you fight this, and get real momentum going in your startup? Here are some key recommendations:

  • Measure results, not work. Build your business plan and day-to-day operations around real results that are quantifiable and measurable. For example, a result is not forty hours of work, but a prototype complete, partner contract signed, or first customer sale.

  • Focus and prioritize. There will always be more things to do than anyone has hours in a day. Focus means act instead of react, act on the important things. Don’t allow yourself to be interrupted by “urgent” issues of the moment, which may not be important.

  • Live the 80/20 rule. Pick the 20% of your important tasks that will deliver 80% of the results. Judiciously apply the 20% of your energy where it will achieve 80% of the momentum you desire. Maintain that balance of work, family, sleep, and unwind.

  • Communicate effectively. People can’t do the job you want unless you communicate effectively. So they scurry around trying to look busy, or work on random things that they hope might generate momentum. Tell people what results you expect, tell them how they measure up so far, and tell them how much you appreciate their efforts.

  • Recognize the finish line. Don’t burn yourself and everyone out, by continuing a forced march after you pass the finish line, or even a major milestone. Gather your thoughts and savor the small successes along the way.
  • During the early start-up phase, most of the momentum in a new company derives from the entrepreneur's own commitment and self-sacrifice. You do almost everything by yourself, and your focus is on building enough cashflow so you can start bringing in people to help you. Watch yourself for wasted motion during this stage.

    Cashflow is the element of momentum that allows you to hand over jobs to other people and do more of your core passion jobs, like creating content or designing new products. This creates more value in your business and increasing cashflow – more momentum.

    What you then want is for the momentum to compound, with each new employee or outsourcer you hire to help, to give you get more time to create value and ultimately, increase profits. At this point especially is where you need to watch out for fake work, which thrives in less dedicated hires, outdated cultures, and old work processes.

    Recent research indicates that across all business organizations, as much as 50% the work that people do in that stage is just motion not related to their company’s strategies. Think of the drag this can put on your momentum.

    Starting a new business is a little like taking off for the first time as the pilot of a new airplane. You need to push that throttle all the way to the dashboard until your knuckles are white, but never forget the relationship between motion and momentum.

    Marty Zwilling

    Posted via email from Ranjan's posterous

    Wednesday, October 28, 2009

    Links from my Blog

    Weekly Digest of Money Management Updates & Links

    Posted: 27 Oct 2009 07:32 PM PDT

    Every week, I will post a few updates and links that would be of interest to you for your money management decisions.

    1. Behavioural Aspects of Investing in Stocks: All of us have behavioural biases while we manage our money. More than deciding what’s right or wrong, it’s important to be aware of the biases.
    2. Second Quarter Review of Monetary Policy 2009-10: RBI has kept most rates unchanged other than the SLR, indicating a tightening in view of the inflationary pressure in the future. Higher provisioning for lending to the Real Estate sector also dampened the spirits of this sector.
    3. 25 Things That They Will Not Disclose: Original story on Outlook Money on the 51 things they don’t disclose.
    4. Childrens Education and Marriage Planning: A primer on how to get started when you want to plan for your future stars, your children.
    5. Buying Insurance over Other Investments: Opportunity Cost or Opportunity Lost: A lucid comparison on Insurance and Investments.

    I also have been adding resources on my Online RupeeManager Workshop. Check it out.

    Most Commented


    Posted via email from Ranjan's posterous

    Tuesday, October 27, 2009

    What Startups are Really Like

    This one is truly an essay to read again and again

    It's Paul Graham's essay on what startups are really like.

    Posted via email from Ranjan's posterous

    Articles on personal finance" style="color: #888; font-size: 22px; font-family: Arial, Helvetica, sans-serif; font-weight: normal; text-decoration: none;" target="_blank">Website on personal finance


    Childrens Education and Marriage Planning

    Posted: 25 Oct 2009 08:07 PM PDT

    We as human beings don’t have any stronger aspiration than giving the best of everything to our children. “Every child is a Star” says the advertisement of a company. All of us dream of making our kid a star. And to accomplish this dream we are ready to do whatever it takes. The biggest challenge lies in converting this dream into reality. Every parent wishes to make their child a Doctor or an Engineer or a MBA or something else when he/she grows up. To realize this dream, setting aside money for the kid’s education is a top priority for parents.

    Buying Insurance over Other Investments: Opportunity Cost or Opportunity Lost

    Posted: 25 Oct 2009 01:21 PM PDT

    It’s March, the tax planning season is at its peak and Ajay (person earning 6Lakhs pa working in an MNC) has started his yearly ritual of scouting for investments for saving income tax. Ajay tells his financial planner Pankaj that he is looking for an insurance plan which is very low on risks and will give good returns. Pankaj is a smart financial planner and tosses a question to Ajay which puzzles him. Pankaj asks Ajay “Do you buy a general insurance product for your car which gives you car insurance plus returns at the end of the year?” Ajay says “Car insurance plans are meant for protection against risks like accidents and not for returns.” On hearing Ajay’s answer, Pankaj smiles and says “Bingo, you are absolutely right. Don’t you think the same applies to life insurance also? Returns should be best left to investment products and not insurance. Life insurance should be bought only to cover the risk of loss of life and remaining surplus money should be routed through investment products for superior returns. A person should not mix insurance and returns.”

    Posted via email from Ranjan's posterous

    Seven Zen Principles to Guide Your Money and Your Life

    Posted By Flexo On October 26, 2009 (8:00 am) In Personal Finance

    Article taken from Consumerism Commentary: A Personal Finance Blog Since 2003 -
    URL to article:

    A few years ago, I visited the Japanese Tea Garden in Golden Gate Park in San Francisco. Japanese gardens are designed precisely to appear natural, resulting in an interesting collision between nature and man. There is a set of principles or aesthetics that guide the creation of Japanese gardens, including the dry gardens commonly called “Zen gardens.”

    The basis for these modern Japanese aesthetics has existed for thousands of years and is rooted in Buddhist writings and teachings. However, the full concept of aesthetics relating to these ancient ideas has been discussed only within the past two centuries, as the the traditional Japanese concepts have been infused with the Western idea of art and aesthetics.

    These same Japanese aesthetics, the attributes that define a Japanese garden, can be further stretched by the Western mind to relate to other areas of thought. If you are particularly interested in personal finances, as we are here at Consumerism Commentary, you might attempt to apply these concepts to attitudes and behaviors surrounding interaction with money.

    Here are seven aesthetics rooted in Japanese culture that can be drawn upon to make us think about the way we live with and deal with money, from personal expenses to investing.

    kanso 簡素

    Keep your finances simple. The extreme limit of necessity would be to have no other financial accounts but one checking account for paying your bills. Simplifying at this level may beyond the limit of practicality even if still possible. But there is no reason I should continue to have savings accounts at seven different banks, even if seven is an odd number, compliant with other aesthetics.

    In addition to utilize as few banks as possible, simplify your investment accounts. Keep your investments in one account in one index fund or target retirement fund that matches your risk profile. This also makes it much easier to evaluate your asset allocation to ensure your investments on the whole match your tolerance for risk.

    There is rarely a need to have more than one credit card for your personal matters. Zero is an even better number.

    Simplicity in all financial matters is an attainable goal.

    seijaku 静寂

    Managers of actively managed mutual funds earn their pay by buying and selling investments frequently. Index funds take the opposite approach by matching a stock index, adding or removing stocks only when the index does, which is rarely. Index funds embody this concept of stillness. Unnecessary activity, like stock trading, makes the stock broker rich while you’re adding risk and decreasing your chance of beating an index fund’s performance.

    Keeping your wealth still and motionless allows time to have a chance to cultivate it. The effect of compound interest increases when you let it work for decades.

    If you’ve simplified your finances down to a small number of accounts, you can further keep your money motionless by removing the necessity of transferring funds from one place to another. The 0% balance transfer game or otherwise moving your credit card balances from one card to another is in direct conflict with this aesthetic.

    datsuzoku 脱俗

    Break free from your possessions. We buy things because they reflect who we are or who we want to be, but no thing can be a true reflection of a self. Not only do material possessions drain you of funds that could be spent on necessities, but you will have less money for sharing with others within and outside of your family.

    Break free from conventional thought and following the bandwagon. You are free to be your own person and find your own path. You should never feel trapped in a job or a career. Even a steady bi-weekly paycheck is a pattern that could be broken without fear. With creativity, draw income to you through something unexpected.

    Don’t confine yourself to your budget. The ultimate way to grow wealth is to spend less than you earn, so as long as that continues, you can break free from your budget and enjoy flexibility without too much worry.

    koko 考古

    Focus on the bare essentials. Add something to your life only if it has a functional purpose and fills a need. This concept is a nod to frugality and sparsity. For example, do you need three televisions, one for each large room in your house? Do you even need one television when you can find entertainment, including comedy, nature, and drama — possibly even crime-focused drama — for free, by sitting in a park and watching other people interact? Wouldn’t it be more fulfilling to visit a National Park than to sit on your couch and watch a documentary about it?

    Decide what in your life is not essential and eliminate it. If something does not add value more than or equal to its expense, consider it a candidate for elimination. I think immediately of the interest that you pay on a credit card balance. Once you pay interest, you’ve paid more than the value of whatever you’ve purchased with the credit card. If you decide a $1,000 television brings $1,000 worth of value into your life, then it may be worthwhile. But if you put that on a credit card and pay the balance and interest over time, the new question is whether that $1,000 television added $2,000 worth of value into your life.

    shizen 自然

    You should represent yourself to the world truthfully and without pretense. There is no need to purchase expensive cars and houses when necessity allows for lesser purchases. Don’t concern yourself with “keeping up with the Joneses.” Without the need to show the world you have more money than you really have, you will lose the desire to buy more than you can afford. As a result, the chances of falling into the trap of debt from unnecessary spending will diminish.

    My thoughts on this are drawn to people with public-facing careers. Real estate agents, for example, often want to project an aura of success. If clients believe that the agent is rich, the clients will then believe that they are successful agents. The natural conclusion is that these agents are successful because they represent clients fairly and offer quality houses. The same is true for lawyers whose business is representing clients in court trials. Lavish spending projects an image of wealth, which indicates to prospective customers a history of successful court appearances.

    This is all show and all pretense. Anyone can look wealthy or successful thanks to the availability of credit. You can’t see what lurks beneath someone else’s surface.

    Do not cover up all that is natural. Do not hide money or money-related problems from your partner or spouse. Finances should be part of a communication that is open and honest, not hidden beneath layers of creative stories.

    fukinsei 不均整

    Create a budget, a monthly spending plan that outlines your limits for expenses in a variety of categories that make sense for you. A budget by definition starts out the same each month but will look different by the month’s final day. Life’s asymmetry is natural, and your budget should reflect this asymmetry while maintaining balance. You spend more for gifts as the December holidays approach, so you might budget more for gifts in November and December than you might in June or July. In order for this asymmetry to be balanced, an increase in one category at one time should correspond with a decrease either in another category or at another time.

    This flexibility is essential for creating a workable budget. A budget should free you, not trap you.

    Balanced asymmetry appears elsewhere. “Work/life balance” is a relatively new concept that is based on this idea. When my employer talks about “work/life balance,” they are not trying to imply that we should spend an equal amount of hours in our life between our career and everything else we do. It is an asymmetrical approach to living a more fulfilled life.

    yugen 幽玄

    Whenever your personal financial issues are public rather than private, choose subtlety over directness. Do not brag about your successes. There is no need for you to have your latest business acquisition or marriage listed in your college’s alumni magazine. If you give charitably to an organization, you do not need to publicly list your name or the amount of money you donated.

    In the business world, there is a movement towards personal branding. It is good for your career to find ways make yourself stand out among your colleagues or among a sea of job applicants. While I would agree that it’s important to protect your identity, particularly online, from anything that might damage your reputation, the best way to stand out is to be the best rather than to declare you are the best.

    Let others declare it for you.

    A guide, not a rule

    While it would be great if all of the above could apply to our interactions with money all the time, I like to look at these aesthetic concepts as a guide. Just considering these ideas and allowing yourself to think about money in a different way can be enlightening. Perhaps you can strive to achieve several of these concepts in your own life, or perhaps you can appreciate this way of living even if you choose to relate with money in a different manner.

    Simplifying my finances is one way I can start applying this approach to my life. As I mentioned above, I currently use seven accounts for my savings. Many of these I open so I can review them for Consumerism Commentary, but even the purely personal bank accounts number too many. Do you or would you apply any of these aesthetics to your finances?

    Disclaimer: I am not an expert in Japanese philosophy or, for that matter, in personal finance. I drew the above concepts of Japanese aesthetics from a variety of sources.

    Photo credits: semihundido, laRuth, DieselDemon, 田中十洋

    Posted via email from Ranjan's posterous

    The Idea & the Execution

    via Quick Sprout by Neil Patel on 10/26/09

    your idea sucks

    Do you have a business idea that you want to pursue? If so, you are probably wondering if it is going to work and if it is going to make you a ton of money, right?

    I am sorry to be the bearer of bad news, but the chances are, neither I nor anyone else is going to know whether your business idea is going to work or not. So instead of asking people what they think about your idea, here is what you need to do:

    Start the business

    If you are really passionate about your idea, you need to go with your gut and start it. Now, this doesn’t mean you’ll necessarily succeed, but you’ll never know if you don’t try it out.

    If you just keep on asking people if they like your idea, you are going to get mixed results. Most people won’t know the industry you are trying to get into, so they won’t know if your idea is good or not. And even if they are in that industry, they could be wrong.

    By no means am I saying that you shouldn’t ask people for advice, but take it as a grain of salt. Sometimes you just have to do what you want to do.

    Save your money

    When you are starting your business money will be tight, so you shouldn’t get fancy when it comes to laying the basic groundwork. For example, there is no need to hire a high priced attorney to incorporate your business when you could just go to Legal Zoom and spend $149.

    Once you start making money you can go back and pay a good law firm to work on your incorporation. The point I am trying to make is that there is no need to spend thousands of dollars on things that won’t help your business make money… especially when you first get started.

    You should reserve all of your cash for things like infrastructure, supplies, employees, and potentially marketing if you have enough cash. And most importantly, always keep a good portion of your cash on reserve for the unexpected.

    Prove me wrong

    I said your idea sucks, right? Well now that you have started your business you need to prove me wrong. And the only way you can prove me or anyone else wrong is by making money.

    This doesn’t mean you have to be profitable, but instead you have to have meaningful revenue numbers. For example, if your company brings in $1,000 a month, that could be meaningful revenue number as long as your monthly expenses aren’t exceeding $5,000 month. On the other hand if your company brings in $3,000 a month and your monthly expenses are $30,000, that isn’t a meaningful revenue number.

    If you are having trouble getting to revenue, I don’t know what to say other than to try harder. I wish I could tell you the secret sauce that will cause your business to boom, but I don’t know it. The secret sauce is different for every business.

    The best advice I can give you is to look at your competitors and see what they are doing. This should give you a good understanding of what you need to do to make money. Just don’t copy everything your competitors are doing because what works for them may not work for you.

    Don’t get ahead of yourself

    Hopefully your business idea is working out and making money, but if it isn’t, don’t stress out. Pick yourself up and keep trying other ideas until something works.

    If you are making money, pat yourself on the back because you’re half the way from not having a shitty business idea.

    You now need to get to profitability. The two main ways you can do this is by either cutting your costs down (which could be a bad idea) or by figuring out creative ways to make more money.

    I typically favor the second option and spend time on sales, marketing, and business development deals to get my companies to profitability.

    Whatever route you decide to take, the best advice I can give you is to stop dreaming. What I mean by this is that you’ll tend to spend a lot of your day imagining what will happen if you get more sales, did more marketing, or even locked in a business development deal. You may even dream about what you’ll do with the money you’ll make.

    Dreaming is a waste of time and all it will do is cause you not to reach your goals. If you really want to achieve your goals you have to act on things and work hard. And once you get to a point where your business is flourishing you still can’t dream because everything isn’t in your control. Things like lawsuits and recessions can crush your business and cause you to go broke.


    I know this blog post is a bit basic compared to most of my blog posts, but I really want to get you to stop asking people for input on a business idea you may have. Just because someone was successful in the past or went to a good college, it doesn’t mean that they’ll know a good business idea if it stares them in their face.

    For example if you asked me what I thought about Facebook, Twitter, or even Hulu when they first came out, I would have told you that they would fail. But I was wrong and I probably will be wrong when it comes to predicting thousands of other business ideas.

    Remember, just because someone is in the industry you are trying to enter, it doesn’t mean they’ll know what’s best for you!

    Posted via email from Ranjan's posterous

    Monday, October 26, 2009

    How to Build Sustainable Products

    via Trizle by The Trizle Team on 10/26/09


    1. "Step right up! Step right up! Buy the Miracle Growth JOOOOOOOOOOOCE!"
    2. "You will get 10 times taller and 20 times stronger and 400 times sexier by sipping this juice!"
    3. "Get it for $986,594,895,820,958,253,253,233,253,235.99! TODAY ONLY SON!"

    The Big Bad Business Amateur

    The Big Bad Business Amateur thinks thriving in business is a zero-sum game; that is, the more you take from your customer, the richer you'll become.

    So, they screw Customer X for their $ -- which becomes incrementally unsustainable over the long-term.

    For instance, take the financial industry:

    • Bernie Madoff built a ponzi scheme that stole billions from his customers; his ponzi scheme toppled because screwing over customers = not sustainable.
    • Blackrock, on the other hand, has built a sustainable win/win revenue model by aligning their interests with their customers: the richer their customers become, the richer Blackrock becomes

    Experienced business leaders

    Experienced business leaders take this mindset:

    1. In a free market economy, buyers will gravitate to those where they can get the greatest value
    2. The sustainable way to build a business then is to build products that provide that value

    How do you build sustainable product?

    Make customers richer/happier with every purchase of Product X.

    For instance, take these sustainable revenue models:

    • AdWords: the higher you bid, the more customers you attract
    • Brokerages: the more you invest, the greater value you get
    • Candy bars: the more you have, the happier you get
    • Walmart: the more items you buy from them, the more you save on those items

    Unsustainable revenue models?

    • Cars: its depreciating effect will burn you; the higher you pay for a car, the more money in equity you lose
    • Newspapers: the more you buy, the sadder you get (i.e., you don't need three copies of today's newspaper)
    • Manufacturing in expensive countries: the more a business spends, the more money in opportunity costs it incurs
    • Pyramid schemes: the more you spend, the poorer you become

    Align your interests with your customers' interests.

    You'll build products that will provide customer value ages from now.

    Make customers richer.

    Posted via email from Ranjan's posterous

    Why Warren Buffet Makes Money and You Don’t

    via Trakin' the india business buzz by Arun Prabhudesai on 10/25/09

    Yes, You. For the matter it includes me too but the title seems catchy that way !

    Jokes apart, what is it that out of so many people invested in the Stock Markets only a few make a real fortune out of it? As a matter of fact, barring Mr. Rakesh Jhunjhunwalla I don’t think there is any self-made millionaire in India who made his fortune via the Stock markets (probably very few unknown others).

    Does it mean that the others are ill equipped or the luck isn’t in their stride. No, because there are those Ivy League experts who are adept at number crunching like anyone else, yet they don’t ride the Stock Markets. Luck can be a factor but then not matter how clichéd it sounds,

    “Fortune favors the brave”

    When we are talking about Stock Market Riches, the Oracle of Omaha – Mr. Warren Buffet’s name has to be taken in the same breath. The world’s richest man sits on the top of the world having made him a fortune investing in stock markets over a period of time. What’s more, he has done it for millions of his shareholders as well, invested in Berkshire Hathaway.

    Did you know that a $10,000 investment in Berkshire Hathaway in 1965, the year Warren Buffett took control of it, would grow to be worth nearly $30 million by 2005

    The marketplace is abuzz with Buffet’s investment principles with dozens of books and millions of citations on the Internet. But, then we haven’t seen anyone come remotely close to the fortunes that Mr. Buffet has made.

    Technical and Fundamental Analysis apart, there are some very simple yet important principles which are highlighted in Mr. Buffet’s Investment rationale.

    Never invest in a business you cannot understand

    Sound simple. The philosophy is so profound yet how many of us tend to avoid it. One look at his portfolio and the statement makes all the more sense .Coca-Cola, Nike, Procter & Gamble, J&J. The business intricacies apart, the companies make products we can all relate to and probably use them too on a regular basis.

    Risk can be greatly reduced by concentrating on only a few holdings

    How many of us have heard, “Never put all eggs in one basket” or Diversification is the key to effective investment. But, then aren’t we culprits of over-diversification at times. I remember holding 17 stocks in my portfolio at one time. Over diversification leads to dilution of possible gains and it is difficult to track 17 companies at once.

    Mr.Buffet’s portfolio has a list of 41 stocks. It may sound too much, but then he has accumulated them over years and has hundreds of people managing his investments now.


    This single word is the game changer of sorts. This virtue alone separates the likes of Mr. Buffet, Peter Lynch from the average Joe. The explanation for this is best understood in terms of Mr. Buffet’s principles itself.

    1. Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years
    2. Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market
    3. The advice “you never go broke taking a profit” is foolish
    4. Buy a business, don’t rent stocks

    The quotes speak for themselves; invest in Stock Markets to become a co-owner and not to make profits out of fluctuations.

    It would be wrong to say that these 3 are the principles that made Mr. Buffet his riches. A lot of research and number crunching is responsible for Mr. Buffet buying stocks at a “Fair” price or on the basis of intrinsic value which the whole world is trying to figure out. But these are some no-nonsense jargon free fundamentals that can go a long way in ensuring a long term healthy investment portfolio.

    I would like to know from Stock Market Enthusiasts out there – Do you think that if you stick to these 3 principals of Mr. Buffet, you will make money in Stock market?

    [This post has been written by our regular contributor Ankit Agarwal, an ERP Consultant by profession, a wannabe entrepreneur and stock market stalker by passion]


    Posted via email from Ranjan's posterous

    Buying Insurance over Other Investments: Opportunity Cost or Opportunity Lost

    via Personal Finance 2.01 on 10/25/09

    It’s March, the tax planning season is at its peak and Ajay (person earning 6Lakhs pa working in an MNC) has started his yearly ritual of scouting for investments for saving income tax. Ajay tells his financial planner Pankaj that he is looking for an insurance plan which is very low on risks and will give good returns. Pankaj is a smart financial planner and tosses a question to Ajay which puzzles him. Pankaj asks Ajay “Do you buy a general insurance product for your car which gives you car insurance plus returns at the end of the year?” Ajay says “Car insurance plans are meant for protection against risks like accidents and not for returns.” On hearing Ajay’s answer, Pankaj smiles and says “Bingo, you are absolutely right. Don’t you think the same applies to life insurance also? Returns should be best left to investment products and not insurance. Life insurance should be bought only to cover the risk of loss of life and remaining surplus money should be routed through investment products for superior returns. A person should not mix insurance and returns.”

    Posted via email from Ranjan's posterous sent you a link to content of interest sent you a link to the following content:

    What’s the best investment you’ve ever made?

    The sender also included this note:

    Interesting stuff!

    Posted via email from Ranjan's posterous

    Sunday, October 25, 2009

    About Page for My Blog

    I am the captain of a personal finance team. I call it the IPFL Team (Indian Personal Finance Literacy Team). Each of my team members have a personality and I have a name for them too.

    And the goal of this team is to change the way Indians manage their money.

    Let’s take a look at the team. They are:

    1. This Blog, aka Sehwag. The blog has been there for the last three years. And from being an e-scratch pad to improve my own knowledge, it now has an opinion of it’s own. It’s a plain, simple commonsense approach without getiing into too much technicalities. Hitting the ball, aka Sehwag, is all that matters.


  • RupeeManager,  aka Sachin. RupeeManager is a desktop software that helps you track and manage your money. It’s the software that powers my effort to change the way Indians manage their money. For me, it’s the star member!
  • RupeeCamp Workshops, aka Dhoni. RupeeCamps is a money management workshop which will help you to make better financial decisions. It is the Captain of my team. The workshops would be the lynch pin around which everything revolves.
  • RupeeManager Online Workshops, aka Yuvraj. This e-Workshop will be an online version of the RupeeCamp in-person workshop. The online workshop would be the cleanest hit, like Yuvraj, the cleanest hitter!
  • Personal Finance201, aka Raina. This website will offer updated articles, calculators and other resources on personal finance. Among the stars, this one is a cool performer.
  • Forum, aka Bhajji. The RupeeManager Forum is the place to discuss money management issues. A place where you can learn and share. Like Bhajji, I would like members to speak their mind here.
  • Zoho Tracket Application, aka Sourav. The online version of RupeeManager software. The app has earned me dollars from around the world and not just India. That’s why it’s named Sourav, who was the first not to fear the global players!
  • Slideshare Presentations, aka Zaheer. These are presentations on personal finance that I have uploaded on Slideshare. The presentations which make the largest impact. Like Zaheer with his opening bowling.
  • RupeeManager on Twitter, Praveen Kumar. The twitter channel for RupeeManager. The place with few words. Well 140 characters shouldn’t be hard for Praveen Kumar!
  • Facebook Page on RupeeManager, aka Ishant. Apparently, Ishant’s the sweetest face in the team.
  • Advisor’s Directory, aka Gary Kirsten, the Chief Advisor!!. This is the place where all advisors can register and make their webpresence felt.
  • Apart from the playing 11, I have a few things up my sleave. The future stars. They are:

    1. Financial Products Database,
    2. Satisfaction Surveys,
    3. Financial Freedom Yearbook

    So you can see that I am about to change the world! :) Atleast, change the way Indians manage their money.

    There’s a question that doesn’t leave me alone, “What can you offer the world that no one else can?”. It’s a pretty tough question. Maybe this blog will help me with finding the answer. In any case, I believe that I can be the medium which can change the way Indians manage their money!

    Thanks for stopping by. Comments and feedback is most welcome.

    Posted via email from Ranjan's posterous

    What Makes Businesses Fail Financially

    via Trizle by The Trizle Team on 10/25/09


    • Why did companies fail during the 2008 financial crisis?

    It went like this:

    • Loan mofo: "We want our money!"
    • Leveraged mofo: "We don't have money!"
    • Loan mofo: "We will kill ya"
    • Leveraged mofo: "OH NOOOOOOOOOOOO!"

    When the economy tanked, companies that failed had loans that they couldn't repay.

    What Will Make You Fail

    Debt -- especially the long-term ones with variable interest rates -- will suck you down, and will be the main cause of your impending failure.

    • Google avoids long-term debt.
    • Microsoft avoids long-term debt.
    • Apple avoids long-term debt.
    • Walgreen's avoids long-term debt.
    • Any company with great financials = no long-term debt.

    Unless your main line of business is providing loans (i.e., you're a bank), leveraging your company = NO GOOD.

    (The banks that died over-levered themselves.)

    Instead, ask yourself this:

    "What if we could get money for free?"

    "BAM DANG SON HOW AN I DO THAT?!?!?!!" you're asking.

    Raise it.

    • "No! You shouldn't give away your equity! Boo!"
    • "You work so hard! Investors are sharks!"

    The points:

    • Equity financing (i.e., raising money from investors) is free money with no interest rates (i.e., helps you grow much quicker).
    • Avoiding interest costs puts money back into your business to reinvest, and grow exponentially stronger financially.
    • You can always buy back the sold equity.

    Solid businesses perform financially awesome to the awesome to the max avoid long-term debt.

    • When you: (1) avoid debt, and (2) keep raising money = YOU WILL NEVER FAIL HIGH FIVE

    No debt.

    Posted via email from Ranjan's posterous


    Being half hearted makes no sense, agree!

    via Seth's Blog by Seth Godin on 10/25/09

    I don't know if this happens to you, but I'm noticing it more and more. Someone offers you a refund, or agrees to sell you something or even hires you to do a project, but then spend a lot of time explaining that it's a one time thing, or that it's against policy or it's not even something they like to do.

    What's the point of agreeing to anything begrudgingly? Does it get your partner to do his best work? Does it increase the chances that you'll get to win next time?

    If you're going to do something, do it. Go all in. Doing it half in makes no sense at all to me. It's a like a store that has so many rules and regulations about sales and exchanges that you wonder if they really want to be bothered to sell you anything at all.

    Posted via email from Ranjan's posterous

    Tinybuddha: Do Happy: Impress Yourself

    October 23, 2009

    Posted: 23 Oct 2009 08:14 AM PDT

    “Never tell me the sky’s the limit when there are footprints on the moon.” -Unknown

    A lot of people find self-imposed limits comforting. If you only believe a brief list of options is possible, you’re not failing by staying within your comfort zone; you’re merely being reasonable.

    Unreasonable people make things happen. They dream big dreams and risk pursuing them. They see how things could be, not just how they are. They don’t believe “can’t” until they prove it themselves.

    Be unreasonable today. Stretch the limit of what you think is possible, and then take a step along that path. Remember: you’ll regret the things you didn’t do more than the things you did.

    Posted via email from Ranjan's posterous

    The Honest Truth - Should we fire the Fund Manager?

    Btw, why is it a honest truth? Does that mean it's not a dishonest truth? 

    Hear this one from Ajit Dayal.
    Should we fire the Fund Manager?
    23rd Oct 2009

    Or should the Board of Quantum Asset Management Company Private Limited fire me?

    Or, worse, should investors in the Quantum Long Term Equity Fund bail out and put their money in some other equity mutual fund?

    Hang on: let me tell you why I am raising these really important questions.

    During the many hours of discussions and presentations of the Path to Profit across many parts of South India, I warned the audience:

    "We were the first to say that the BSE 30 Index can touch 21,000 by June or July 2010. We said that when the Index was bouncing around in the 8,000 to 10,000 range. Our performance numbers have been good for a 1-year, 2-year, and 3-year periods. But, I warn you: though we were the first to make the case for a bull market, we will now underperform."

    The audience gave me that strange look reserved for really strange people.

    "Strange, isn't it? I stand here in front of you, predicting a bull market and then saying that the Quantum Long Term Equity Fund will not do well."

    "Why? Because as value managers, the stocks we own will begin to look 'expensive'. And so we will sell those 'expensive' stocks. But we are humble enough to recognise that our selling will have no impact on the market - the stock markets will continue to rise. Remember, in bull markets fear is out and greed is back. Irrational prices will prevail again. As we sell out of stocks, our cash levels will increase. Cash earns us 4% to 5% in a year. That is useless when compared to a roaring bull market when stocks can surge 4% in a day! So, ladies and gentlemen, we will underperform. We are predicting our own death!"

    Therefore, what should we do?
    This is the background.
    This is why I pose the question: should we fire the Fund Manager and all the research analysts?
    Or should the Board fire me?

    The email hit my inbox today from our internal sales team.
    There are 248 diversified equity funds out there.
    And the Quantum Long Term Equity Fund was ranked 248.

    That's right: dead last.

    I rubbed my eyes.
    I sent back an email: "Are you sure?" I asked.
    "Yes" was the reply, "we are last."

    I had not written an Honest Truth for a long time.
    Here was a great opportunity: an opportunity to tell you that we are ranked last!

    Such an event may not last long. So, I better write about it and let you know about it before this historic moment slips away unnoticed by any ranking tables, unnoticed by anyone.

    Table 1: Quantum Long Term Equity Fund ranks last - for the past one week!
    Returns (%) 1 Week Ended October 21, 2009 1 Month Ended October 21, 2009
    Quantum Long Term Equity Fund -2.12 +3.27
    Category Average (Equity Diversified) +0.02 +3.60
    Quantum Long Term Equity Fund Ranking 248 136
    Total 248 248
    How many funds have we done better than? 0.00% 45.16%
    (Source - Returns for Growth Plan

    But getting back to our prediction and discussions during the Path to Profit: we were right.
    But, wow! - That was quick.
    My prediction of 'underperformance' was accurate.

    And the BSE 30 Index is nowhere near the 21,000 level - we still have another +21% to get there.
    Our cash levels have increased. The fact sheets for the Quantum Long Term Equity Fund indicate that the Fund owned 27 stocks as of September 30, 2009 (29 stocks in August) and the cash level in the Fund was 9% (2% in August).

    So, clearly the Fund is selling out of some stocks and not putting the money back in the markets.

    But how do we get a -2.12% rate of return for the week ended October 21, 2009?

    Table 2: QLTEF did not own the winners - for this week!
    The Top 10 stocks owned by the Fund Their weight in the portfolio as of September 30, 2009 How did they perform for the week ended October 21?
    HDFC 6.20% -3.8%
    TCS 5.93% +6.9%
    Infosys 5.55% -4.0%
    HDFC Bank 5.30% -2.5%
    Hind UniLever 4.48% -6.4%
    ONGC 4.40% -6.1%
    Bajaj Auto 4.38% -8.4%
    Container Corp 4.04% -0.4%
    Zee 4.03% -6.0%
    BPCL 4.01% -4.5%
    BSE-30 Index   -1.3%
    Reliance Ind Not owned +0.2%
    ICICI Not owned +0.9%
    L&T Not owned -1.0%
    Unitech Not owned +0.7%
    DLF Not owned +9.2%
    Source: Bloomberg, BSE

    Owning cash hurts the upside for sure, but owning the 'wrong' stocks is what can hurt most!

    For the week ended October 21st, the stocks we owned did not "rise" in price.
    The stocks we did not own, did a lot better.

    So, we suffered.
    For that one week.

    A lesson for all of us
    The way stocks are researched for the portfolio of the Quantum Long Term Equity Fund has not changed.
    The way stocks are picked for the portfolio of the Quantum Long Term Equity Fund has not changed.

    But the way the markets price the stocks we own changes every minute!
    The last time we checked, the managements of the companies we own still run the way they ran their businesses last week - or last month.

    But, on some days, the stock markets love the share prices of certain companies.
    And on some days it loves some other stocks!

    A similar portfolio gave the Quantum Long Term Equity Fund a pretty good track record for the 1-year, 2-year, and 3-year time periods ended October 21, 2009.

    Table 3: Read our Offer Document carefully to decide where to park your savings for the long term.
    Quantum Long Term Equity Fund - Performance Data
    Returns (%) 3 Month Ended 6 Month Ended 1 Year Ended 2 Year Ended 3 Year Ended
    Quantum Long Term Equity Fund 19.38 66.76 71.63 7.9 14.42
    Category Average (Equity Diversified) 17.54 61.94 64.38 -0.71 10.83
    Quantum Long Term Equity Fund Ranking 63 71 61 22 45
    Total 235 221 210 185 156
    How many funds have we done better than? 73.19% 67.87% 70.95% 88.11% 71.15%
    Quantum Long Term Equity Fund was launched in March 2006

    So, markets bounce.
    Share prices jump all over the place.
    But the investment thesis for us to own stocks in the Quantum Long Term Equity Fund has not changed.

    The ranking numbers are - like the clouds - passing in nature.

    I am sure we were ranked number one sometime...I missed writing about that!
    I happened to catch our wonderful 248/248 ranking. And I write about it.

    Rankings do not change what we do.

    Here is what happened to those same stocks for the one day, October 22nd compared to where they ended on October 21st.

    Table 4: QLTEF had a far better day on October 22nd!
    The Top 10 stocks owned by the Fund Their weight in the portfolio as of September 30, 2009 How did they perform for the one day from October 21st to October 22nd.
    HDFC 6.20% -0.5%
    TCS 5.93% -0.9%
    Infosys 5.55% +2.1%
    HDFC Bank 5.30% +0.4%
    Hind UniLever 4.48% +1.4%
    ONGC 4.40% -0.6%
    Bajaj Auto 4.38% -1.2%
    Container Corp 4.04% -2.7%
    Zee 4.03% +0.0%
    BPCL 4.01% +0.0%
    BSE-30 Index   -1.3%
    Reliance Ind Not owned -2.2%
    ICICI Not owned -4.1%
    L&T Not owned -3.9%
    Unitech Not owned -5.4%
    DLF Not owned -4.9%
    Source: Bloomberg, BSE

    So, the stocks that hurt us because we did not own them for the week ended October 21st had a terrible October 22nd.

    We have no clue why.

    I have not seen the ranking tables for the one day October 22nd - if they exist - but I can wager we had a better rank than 248 out of 248!

    As for firing our fund managers or the research analysts: they are really good people and very disciplined in what they do.

    Rankings don't rattle them.
    Assessing and pricing risk is what they do very well.
    And generating returns over longer periods of time.

    They avoided stocks like Reliance, ICICI, L&T, DLF, and Unitech because the risk-return reward was not attractive - or the managements are totally avoidable.

    We let others boast about their rankings and their stars and "returns".
    We focus on risk we wish to take and the return we wish to be rewarded for the risk we have agreed to take.

    Like my late uncle sang in his song: Aadmi ache hai, par waqt bura hota hai...

    The Fund manager and their research team that looks after your savings in the Quantum Long Term Equity Fund is good - as is the process - the times are strange.

    Or at least the week ended October 21st was strange.

    So, my appeal to the Board of Quantum AMC is: please don't fire me.

    And my appeal to you is: If you wish to double your money in a day - or are scared to invest in a Fund that is willing to take it on the chin once in a while for correctly assessing long term risks of buying certain stocks - then, please stay away from the Quantum Long Term Equity Fund.

    But if you wish to make sensible long term returns - and don't get rattled by this 248/248 ranking for one week (just as we are not) -

    Suggested allocation in Quantum Mutual Funds (after keeping safe money aside)
    Quantum Long Term Equity Fund Quantum Gold Fund
    (NSE symbol: QGOLDHALF)
    Quantum Liquid Fund
    Why you
    should own
    An investment for the future and an opportunity to profit from the long term economic growth in India A hedge against a global financial crisis and an "insurance" for your portfolio Cash in hand for any emergency uses but should get better returns than a savings account in a bank
    Suggested allocation 80% 20% Keep aside money to meet your expenses for 6 months to 2 years

    Disclaimer: Past performance may or may not be sustained in the future. Mutual Fund investments are subject to market risks, fluctuation in NAV's and uncertainty of dividend distributions. Please read offer documents of the relevant schemes carefully before making any investments. Click here for the detailed risk factors and statutory information"

    Note: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt Ltd and Quantum Asset Management Company Pvt Ltd.. Views expressed in this article are entirely those of the author and may not be regarded as views of the Quantum Mutual Fund or Quantum Asset Management Company Private Limited. To write to Ajit, please click here.

    Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The authors, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use for the web site
    ©Equitymaster Agora Research Private Limited 2007-08

    Posted via email from Ranjan's posterous

    Guruji' Ka Gyan...






    This message and the information contained herein is proprietary and confidential and subject to the Tech Mahindra policy statement, you may review the policy at externally and internally within Tech Mahindra.


    Posted via email from Ranjan's posterous